As we move forward this year, prepare for the tax filing season in 2024. Looking at the changes and updates compared to the previous tax year is crucial. Nowadays, the tax complexities and approaching deadlines are getting a lot exhausting. It’s important to understand these changes are mandatory for taxpayers.
This year’s tax season brings challenges and opportunities for many taxpayers. Whether contributions to an FHSA or the introduction of multigenerational home renovation tax credits, each is beneficial.
Let’s begin the article by stating the changes in the 2024 tax season. Let’s explore how you can optimize your returns and follow the rules and regulations set by the Canada Revenue Agency (CRA).
Previous Year 2023 Tax Outlook
While moving further to discuss the changes in the tax season 2024, let’s look into the previous tax season 2023. This will help you compare the changes made over the past year by CRA. Last year, some of the major changes were:
Extension Of The Due Dates – 2023
There was a special extension on the deadline for taxpayers to file their taxes. This date was extended from its start of February 19th, 2024, till April 30th, 2024.
Because of this extension, the taxpayers had sufficient time to prepare the documents and submit their returns. The main aim of this extension was to address the stress of meeting deadlines for many enterprises. So this way, they were able to prepare the tax filing accurately and easily.
Introduction To The New Multigenerational Home Renovation Tax Credit In 2023
The tax season 2023 has introduced a multigenerational home renovation tax credit. These credits are for the families. It provided them with the option of investing in home improvement. This helps them out in multiple generations.
This opportunity enabled many individuals who were eligible to claim expenses. In general, it is related to renovations that enhance accessibility, safety, or functionality for elderly relatives or persons with disabilities. It aimed to support families in achieving a sustainable life for all generations.
Adjustments To Tax Deductions And Credits With An Increase In Penalty
During the tax season 2023, they also offered adjustments in various tax deductions. These adjustments aimed to align tax incentives. These were evolving societal desires and economic priorities.
The adjustments were made for some of the major purposes. These were the medical expenses, tuition fees, and charitable donations deductions.
CRA also increased its unpaid tax penalty. The rate of this penalty was up to 10%.
Apart from these changes, there was a change in the federal income tax bracket. The government adjusted these brackets by 4.7% to account for inflation. Therefore, the three holds of each federal income tax bracket account for rising living costs.
Also, the New Canadian Dental Care Plan (CDCP) was announced. This plan covers most basic dentistry costs. These include cleaning, X-rays, fillings, crown and dentures, root canals, and extractions. These plans were for Canadians with an income of less than $90,000.
Tax Season 2024 Changes
The changes made in the 2023 tax return season helped many citizens during the tax filing process. Now, as the year changes, so do the rules and regulations. The 2024 tax filing brings many beneficial changes for the residents of Canada. These are:
Contribution To First Home Saving Account
The major change that remains pertinent in tax season 2024 is the contribution to first home saving accounts (FHSAs). This helps the taxpayers to assist them in saving for their first home purchase. It provides reasons for first-time buyers and individuals purchasing homes in multigenerational households.
The tax season, or the year 2024, defines the flexibility of FHSA withdrawals. It broadens the scope of eligible expenses or refines the tax treatment, especially withdrawals for purposes beyond homeownership and purchasing. It allows taxpayers to reduce their taxable income and helps them save for future house-buying expenses.
By contributing to the FHSA plan, taxpayers can reduce their tax liability. This helps them to accelerate their journey towards homeownership.
Other minor changes include:
Tax Filing Due Date Or Deadline
Like the previous 2023 tax year changes, the filing deadline remained on April 30th, 2024. Taxpayers are required to file their returns before this date. The paper that can only be submitted after the due date is required to pay penalties and interest charges.
Tax Rates And Bracket Adjustments
Due to inflation and changes in economic conditions, the tax rates and brackets were adjusted accordingly. These adjustments vary at different income levels of the amount of tax owed by taxpayers.
Digital Filing Options By CRA
The Canada Revenue Agency (CRA) brings the option of digital filing by enhancing electronic filing options. Taxpayers are asked to utilize these online platforms and software. They can submit their returns to this digital filing securely and efficiently.
Changes In The Eligibility Criteria
The 2024 tax season has changed the eligibility criteria, especially for various credits and deductions. You must first review eligibility requirements carefully. This ensures they can claim the credits accordingly.
Conclusion
Across the boundaries of Canada, February 19th, 2024, marks the beginning of tax season for the year 2024. This is the time for taxpayers to file their returns and go through the complexities of their taxes. The updates and changes in this tax season year indicate that tax filing is crucial. It helps maximize returns and fulfill CRA rules and regulations.
Contributing to FHSAs to claim credits for multigenerational home renovations helps in many ways. It provides taxpayers with tax-saving strategies and optimizes the potential benefits. With support for these changes, being well-informed, organizing your financial documents accurately, and seeking professional guidance, individuals can navigate tax season 2024 with confidence. It ensures compliance with tax deadlines for 2024 and maximizes their tax returns for a financially secure future and well-being.